This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
According to Ms. Anders, aSTRA USA, Inc. (the petitioner) argues that the agreement with Santa Clara County is not an ordinary contract because it functions like a regulatory contract, similar to Medicare provider agreements, where parties agree to abide by statutes and regulations rather than create traditional contract rights.
According to Ms. Anders, the petitioner further contends that permitting third‑party‑beneficiary suits under such an agreement would interfere with the government’s ability to administer the statutory scheme.
According to Mr. Frederick, santa Clara County (the respondent) argues that Congress intended the agreement to incorporate the full set of common‑law contract rights, including third‑party‑beneficiary rights that have existed for centuries.
According to Mr. Frederick, the respondent emphasizes that departing from normal contract principles would be contrary to precedent such as Winstar, Mobil Oil, Jackson Transit, and Central Airlines.
Background and question before the Court
According to Chief Justice Roberts, the Court’s central question was whether the agreement at issue qualifies as a contract.
What each side argues
Petitioner Position (ASTRA USA, INC.)
According to Ms. Anders, the petitioner says the agreement is not an ordinary contract but a regulatory contract, similar to Medicare provider agreements, where parties agree to abide by statutes and regulations.
According to Ms. Anders, allowing third‑party‑beneficiary suits under the agreement would interfere with the government’s ability to administer the statutory scheme.
According to Ms. Anders, because many covered entities could bring suits, permitting such suits would create a patchwork of state court regimes grafted onto Medicaid rebate requirements.
Respondent Position (SANTA CLARA COUNTY, CALIFORNIA)
According to Mr. Frederick, the respondent argues that Congress intended the agreement to incorporate the full cluster of common‑law contract rights, including third‑party‑beneficiary rights that have existed for centuries.
What happened at oral argument
Oral argument before the Supreme Court began at 11:08 a.m. on the scheduled date.
What the Court decided
Why it matters
The dispute illustrates how regulatory agreements may be treated differently from ordinary contracts, affecting whether third parties can enforce rights against the government.
The parties contend that the case addresses whether regulatory agreements are treated as contracts for purposes of third‑party‑beneficiary rights, which could affect how agencies draft such agreements.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- dc652d1fba952a8f0271-r1-c648e57d9552f431.pdforal argument transcript
Guide generated September 23, 2026. Automated validation accepted this version.